I don't think its the size it matters, its the quality. although some breeders do try to market the tiny ones as superior. honestly, I don't think most people think that way, at least not on here.
I do have a tiny one, a bit less than 3lbs, but I did not intend to get one her size at all. I wanted a yorkie around 5lbs, but Dolly's face was the first thing caught my eyes, so I asked her breeder, if she's got bigger one that looks like Dolly. her breeder told me Dolly's brother from the same litter looks like him, but he was not for sale. She told me the reason Dolly's for sale is due to her being too small to show(she was already 8months the time I got her). so in my case, its the smaller ones being inferior because they don't really fit into the standards
as far as health issues go, again, it really depends on the quality of the line rather than the size IMO, Dolly's been every bit as healthy as my 5 pounder. but here is the real concern, the tiny ones do have to be watched closely on where they are jumping on or off. but after owning a tiny one for two and a half years, I am so used to it!